A significant source of revenue for Nigeria’s government comes from taxes, the continent’s largest market.
The Nigerian tax system is decentralized, which sometimes poses some challenges. However, some institutions have been put in place to simplify it. The Federal Inland Revenue Service (FIRS), which is the source of the data below, is one such institution.
Company Income Tax (CIT) for Q3 2023 was reported at N1.75 trillion, reflecting a growth rate of 14.27% from N1.53 trillion in Q2 2023, according to the Nigerian National Bureau of Statistics (NBS).
Information on the FIRS’s official website shows that the “CIT is governed by the Companies Income Tax Act (CITA), Cap C21, LFN 2004 (as amended). The CIT is a tax imposed on the profit of a company from all sources. The rate of tax is 30% of the total profit of a company.”
The NBS report indicates that the total local CIT payment for the review period was N651.63 billion, while the foreign CIT payment was N1.10 trillion.
The data provided by the tax institution reveals aggregate cuts across Nigeria’s various sectors, including agriculture and education.
The tax quotas for these industries vary massively, with some contributing as high as 26.18% of the total CIT and some as low as 0.04%.
In Q3 2023, the industries with the highest contribution to Nigeria’s total CIT were Information and communication (₦170,568.35 million); Manufacturing (₦155,722.64 million); Mining and quarrying (₦77,305.86 million); Financial and insurance activities (₦68,465.74 million); Public administration and defence compulsory social security (₦44,926.13 million); Wholesale and retail trade, repair of motor vehicles and motorcycles (₦27,045.58 million); Other service activities (₦22,141.70 million); Transportation and storage (₦15,160.90 million); Agriculture forestry and fishing (₦13,319.71 million); and Construction (₦10,059.49 million).